**Revenue and Expense Data for Tannenhill Company and Electronics Industry**The following is a comparison of revenue and expense data for the current calendar year for Tannenhill Company and the electronics industry. Tannenhill’s data are expressed in dollars, while the electronics industry averages are expressed in percentages.---| **Description** | **Tannenhill Company** | **Electronics Industry Average** ||----------------------------------|------------------------|----------------------------------|| **Sales** | $2,320,000 | 100% || **Cost of merchandise sold** | 1,624,000 | 73% || **Gross profit** | $696,000 | 27% || **Selling expenses** | 394,400 | 15% || **Administrative expenses** | 162,400 | 6% || **Total operating expenses** | $556,800 | 21% || **Income from operations** | $139,200 | 6% || **Other revenue and expense** | | || Other revenue**| 46,400 | 2% || Other expense**| (23,200) | 1% || **Income before income tax expense**| $162,400 | 7% || **Income tax expense** | 69,500 | 4% || **Net income** | $92,900 | 3% |**Explanation:**- **Sales:** Tannenhill Company made sales of $2,320,000, equivalent to 100% in the industry average.- **Cost of Merchandise Sold:** Tannenhill spent $1,624,000 on merchandise, which is 73% of sales, similar to the industry average.- **Gross Profit:** After costs, Tannenhill's gross profit stands at $696,000, matching a 27% industry average.- **Selling Expenses:** Tannenhill's selling expenses are $394,400, equating to 15% of sales, aligned with the industry.- **Administrative Expenses:** These expenses are $162,400 for Tannenhill and 6% for the industry.- **Total Operating Expenses:** **Tannenhill Company Common-Sized Income Statement for the Year Ended December 31**| Description | Tannenhill Company Amount | Tannenhill Company Percent | Electronics Industry Average ||-------------------------------|---------------------------|----------------------------|------------------------------|| Sales | $2,300,000 | | 100.0% || Cost of merchandise sold | 1,624,000 | | 73% || Gross profit | 696,000 | | 27% || Selling expenses | 394,400 | | 14% || Administrative expenses | 162,400 | | 6% || Total operating expenses | 556,800 | | 21% || Income from operations | 139,200 | | 6% || Other revenue and expenses: | | | || - Other revenue | 46,400 | | 2% || - Other expense | (23,200) | | 1% || Income before income tax | 162,400 | | 7% || Income tax expense | 69,600 | | 4% || Net income | 92,800 | | 3% |**b. Observations:**The company is managing the cost of manufacturing products **better** than the industry, and has slightly **higher** selling and administrative expenses relative to the industry. The combined impact causes net income as a percent of sales to be **slightly lower** than the industry average.

The differences between the industry and company net income will be due to differences in the cost…

Answered: Revenue and expense data for the…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

The following income statements were drawn from the annual reports of the Atlanta Company and the Boston Company. Atlanta* Boston* $ 34,800 (15,500) 19,300 $ 86,100 (62,830) 23,270 Net sales Cost of goods sold Gross margin Less: Operating expenses Selling and administrative (12,120) (14,496) expenses Net income $ 7,180 $ 8,774 *All figures are reported in thousands of dollars. Required a-1. Compute the gross margin percentages and return-on-sales ratios of Atlanta and Boston. a-2. Ascertain which of the companies is a high-end retailer based on ratios computed. b. If Atlanta and Boston have equity of $15,600 and $21,400, respectively, which company is in the more profitable business? Complete this question by entering your answers in the tabs below. Req A1 Req A2 Req B Compute the gross margin percentages and return-on-sales ratios of Atlanta and Boston. (Round your answers to the nearest whole number.) Atlanta Boston Gross margin percentages % % Return-on-sales ratios % %
The income statement comparison for Forklift Material Handling shows the income statement for the current and prior year. FORKLIFT MATERIAL HANDLINGIncome statement Comparison Current Year Prior Year (Amounts in thousands) Sales $33,750 $24,800 Cost of goods sold 21,937.5 16,864 Gross profit $11,812.5 $7,936 Expenses: Wages $8,800 $6,189 Utilities 700 200 Repairs 169 350 Selling 506 200 Total Expenses $10,175 $6,939 Operating income ? ? Operating income % ? ? Total assets (investment base) $4,400 $1,400 Return on investment ? ? Residual income (8% cost of capital) ? ? A. Determine the operating income (loss) (dollars) for each year. If required round final answers to two decimal places. B.Determine the operating income (loss) (percentage) for each year.If required round final answers to two decimal places. C. The company made a strategic decision to invest in additional assets in the current year.…
Olde Tyme Beverage Company’s operating activities for the year are listed below. Cost of Goods Manufactured $128,000 Operating expenses 80,000 Beginning inventory, FG 12,000 Ending inventory, FG 16,000 Sales revenue 275,000 What is the cost of goods sold for the year?
The parts department shows gross sales of $116,000 and cost of goods sold of $38,000. What is the gross profit percentage of the parts department? a.32.8% b.48.7% c.51.3% d.67.2%
The following Income statement was drawn from the records of Fanning Company, a merchandising firm: Sales revenue (7,000 units x $160) Cost of goods sold (7,000 units * $87) Gross margin Sales commissions (5% of sales) Administrative salaries expense Required For the Year Ended December 31, Year 1 Advertising expense Depreciation expense Shipping and handling expenses (7,000 units * $1) Net income FANNING COMPANY Income Statement Req A a. Reconstruct the Income statement using the contribution margin format. b. Calculate the magnitude of operating leverage. c. Use the measure of operating leverage to determine the amount of net Income Fanning will earn If sales Increase by 20 percent. Complete this question by entering your answers in the tabs below. Reg B and C FANNING COMPANY Income Statement For the Year Ended December 31, Year 1 Less: Variable costs Reconstruct the income statement using the contribution margin format. Less: Fixed costs $1,120,088 (609,000) 511,000 (56,000)…
Sellall Department Stores reported the following amounts as of its December 31 year-end: Administrative Expenses, $2,400; Cost of Goods Sold, $22,728; Income Tax Expense, $3,000; Interest Expense, $1,600; Interest Revenue, $200; General Expenses, $2,600; Net Sales, $37,880; and Delivery (freight-out) Expense, $300. Required: 1. Calculate the gross profit percentage. 2. How has Sellall performed, relative to the 24.5 percent gross profit percentage reported for Walmart in 2019? (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer.)check all that apply Sellall Department Stores earned a higher gross profit percentage than Walmart. Walmart earned a higher gross profit percentage than Sellall Department Stores. Sellall includes more mark-up in the prices it charges customers than Walmart. Walmart includes more mark-up in prices it…
A consumer products company reported a 20 percent increase in sales from last year to this year. Sales last year were $220,000. This year, the company reported Cost of Goods Sold in the amount of $157,872. What was the gross profit percentage this year? Numerator Denominator Gross Profit Percentage
A comparative income statement is given below for McKenzie Sales, Limited, of Toronto: McKenzie Sales, Limited Comparative Income Statement Sales Cost of goods sold Gross margin Selling and administrative expenses: Selling expenses Administrative expenses Total expenses Net operating income Interest expense Net income before taxes This Year $ 7,350,000 4,610,000 2,740,000 1,390,000 706,000 2,096,000 644,000 101,000 $ 543,000 Last Year $ 5,586,000 3,511,500 2,074,500 1,079,500 613,500 1,693,000 381,500 87,000 $ 294,500 Members of the company's board of directors are surprised to see that net income increased by only $248,500 when sales increased by $1,764,000. Required: 1. Express each year's income statement in common-size percentages. (Round your percentage answers to 1 decimal place (i.e., 0.1234 should be entered as 12.3).)
Revenue and expense data for the current calendar year for Sorenson Electronics Company and for the electronics industry are as follows. Sorenson Electronics Company data are expressed In dollars. The electronics Industry averages are expressed In percentages. Sorenson Electronics Electronics Industry Company Average Sales $870,000 100 % Cost of goods sold (504,600) (64) Gross profit $365,400 36 % Selling expenses $(217,500) (15) % Administrative expenses (87,000) (15) Total operating expenses $(304,500) (30) % Operating Income $60,900 6 % Other revenue and expense: Other revenue 17,400 Other expense (8,700) (3) Income before Income tax $69,600 7 % Income tax expense (26,100) (4) Net Income $43,500 3 % a. Prepare a common-sized Income statement comparing the results of operations for Sorenson Electronics Company with the Industry average. If required, round percentages to one decimal place. Sorenson Electronics Company Common-Sized Income Statement Sorenson Electronics Sorenson…
Following is an incomplete current-year income statement. Determine Net Sales, Cost of goods sold and Net Income. Additional information follows: Return on total assets is 16% (average total assets is $62,500). Inventory turnover is 5 (average inventory is $7,800). Accounts receivable turnover is 8 (average accounts receivable is $7,700). Income Statement Net Sales Cost of goods sold Selling, general, and administrative expenses 8800 Income tax expenses 3800 Net Income
Horizontal Analysis of the Income Statement Income statement data for Winthrop Company for two recent years ended December 31 are as follows: Current Year Previous Year Sales $2,240,000 $2,000,000 Cost of goods sold (1,925,000) (1,750,000) Gross profit $315,000 $250,000 Selling expenses $(152,500) $(125,000) Administrative expenses (118,000) (100,000) Total operating expenses $(270,500) $(225,000) Income before income tax expense $44,500 $25,000 Income tax expense (17,800) (10,000) Net income $26,700 $15,000 a. Prepare a comparative income statement with horizontal analysis, indicating the increase (decrease) for the current year when compared with the previous year. If required, round to one decimal place.
Provide answer please

SEE MORE QUESTIONS

Recommended textbooks for you

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

Horngren's Cost Accounting: A Managerial Emphasis…

Accounting

ISBN:

9780134475585

Author:

Srikant M. Datar, Madhav V. Rajan

Publisher:

PEARSON

Intermediate Accounting

Accounting

ISBN:

9781259722660

Author:

J. David Spiceland, Mark W. Nelson, Wayne M Thomas

Publisher:

McGraw-Hill Education

Financial and Managerial Accounting

Accounting

ISBN:

9781259726705

Author:

John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS